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Posted on Jul 29, 2024

) The firm is financed by 60% equity and 40% debt. The 40% of the firm covered by debt consists of the following three bonds:

a. $1 million @ 6%

b. $2 million @ 9%

c. $3 million @ 7%

If the firms marginal tax rate is 20%, calculate the firms cost of debt and its cost of capital.

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